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WASHINGTON – Taxpayers who reported more than $100,000 in income are less likely to be audited in Maryland and Delaware than almost anywhere else in the nation.

Low to mid-income residents in the region, meanwhile, are more likely to be audited than their counterparts in three-quarters of the country’s Internal Revenue Service districts.

But the good news for all taxpayers is that audits are down, both nationally and in the Maryland-Delaware district of the IRS.

“They are going down in the last two years, definitely,” said Bernie Phillips, tax manager at the National Society of Accountants.

The findings on rich vs. poor audits were calculated using the Transactional Records Access Clearinghouse, a Syracuse University center that used IRS data to track audits of the 1040 and 1040-A forms in each of the agency’s 33 districts across the nation.

TRAC data showed that the IRS district that covers Maryland and Delaware had the second-lowest percentage of audits of wealthy residents in the nation in 1998, when 0.50 percent of returns over $100,000 were audited. Only the IRS district in Houston was lower, with an audit rate of 0.45 percent.

The national average for upper-income returns was 1.13 percent and the highest district, Los Angeles, audited those returns at a rate of 2.56 percent.

In fact, since 1992, Maryland and Delaware have consistently ranked among the three safest IRS districts for wealthy taxpayers. In 1997, well-heeled taxpayers in the area were the nation’s least-likely targets of an audit among the rich.

But wealthy taxpayers in Maryland and Delaware who do face an audit pay for it — they have the nation’s highest recommended taxes and penalties after an audit, an average of $40,840, and spend more than 20 hours being audited on average. Nationally, audits of upper-income returns take an average of 14 hours and the taxes and penalties on such an audit are $21,416.

The relatively low level of high-income audits rings true to Patricia Biscoe, a Rockville accountant who estimated that 60 to 75 percent of her firm’s 200 clients earn more than $100,000.

“I guess it does seem like Maryland is falling under that pattern because we don’t see a lot of audits,” said Biscoe, of Biscoe & Futrowsky.

For clients earning less than $50,000, however, Biscoe said there is “a lot more interest and notices from the IRS.”

That is supported by TRAC data, which showed Maryland and Delaware residents who reported income between $25,000 and $50,000 were audited at the eighth-highest rate nationwide for their income bracket. Those taxpayers were audited at a rate of 0.41 percent, about one in every 250 returns.

That is an about-face from 1993, when area residents making between $25,000 and $50,000 were audited only once for every 400 tax returns — the third-lowest rate in the country.

Low- to middle-income earners who are audited in Maryland and Delaware also faced the highest average taxes and penalties for their tax bracket in the nation — $9,215 in 1998, up from $3,306 just a year before.

The situation for low- to middle-income filers is not all bad, however. Americans in those brackets are still less likely to be audited than wealthy taxpayers, will spend less time in each audit and will have lower taxes and penalties recommended by the auditor.

While audit rates for middle-income earners are higher in Maryland and Delaware than elsewhere, that is not the result of a conscious program or of any auditing schemes employed by the IRS office here, said a spokesman.

Dom LaPonzina said different districts will naturally have audit rates that vary because of differences in the types of taxpayers who live there.

“There’s always going to be disparities between the districts,” said LaPonzina, chief spokesman for the Delaware and Maryland district.

“It’s not practical to think that every district is going to have the same percentages because of differences” in residents’ lifestyles and finances, he said. “The audit numbers may be appropriate for the Delaware-Maryland area, but not for other areas of the country.”

Audits of Maryland and Delaware taxpayers were down overall in 1998 from previous years — 12,980 tax returns were audited in the district in 1998, almost 3,000 fewer than in 1997.

Nationally, while almost 120 million tax returns were filed in 1998, only 551,000 were audited — a drop of more than 160,000 audits since 1997.

The chances of an IRS audit are declining nationally and locally due to a smaller agency workforce, an increase in the number of tax returns filed and a greater amount of time being devoted to customer service, LaPonzina said.

But Pete Sepp, spokesman for the National Taxpayers Union, said the decline in audits is not thanks to better customer service, but to fine-tuning of the audit process by a greedy IRS.

“The numbers in general are decreasing primarily because the IRS is figuring out where it is most likely to hit paydirt” and collect more money, Sepp said.

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